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UAE’s 1.18GW solar farm secures 25-year PPA

The Japanese-Chinese team backing the mega-sized solar project summited a record-low bid of 2.42 cents per kWh during the tender process last September.

The 1,177MW Sweihan solar project, located in Abu Dhabi, has secured a power purchase agreement with local state-owned utility, Abu Dhabi Water and Electricity Company (ADWEC), for a period of 25 years. 

Japanese trading company Marubeni and Chinese solar energy developer JinkoSolar each owns a 20 percent stake in the mega-sized project, while Abu Dhabi Water and Electricity Authority, owner of ADWEC, holds the majority 60 percent stake. 

With construction expected to be completed in April 2019, the project will be funded by international project finance lenders, Marubeni said. 

ADWEA announced the Marubeni-JinkoSolar team as the preferred bidder early this year, after the tie-up summited the world’s lowest bid last September, of 2.42 cents per kWh, outbidding five other competing consortia, according to local reports. The initial size of the project was 350MW under the original ADWEA tender but the winning team also made an alternative proposal to expand the project to over 1.17GW with an even lower offer of 2.3 cents, reports said. 

The United Arab Emirates, as well as other Middle Eastern countries, are looking to increase their renewable energy capacity in a bid to reduce their reliance on fossil fuels and cater to the increasing power demand. 

Solar energy is a big part of the UAE Energy Plan 2050, which aims to have 44 percent of its generation mix from renewable energy sources in the next 33 years. The plan also targets 38 percent from gas, 12 percent from fossil fuel and six percent from nuclear energy. Currently, more than 90 percent of the emirates’ energy supply are generated from gas. 

For its part, Marubeni currently owns and operates four thermal independent power and water projects in the UAE. Sweihan solar plant will be its fifth asset in the country and the company said it will continue to expand its power business in the renewable sector, as well as the conventional thermal sector.